Can “Nudge Units” Help Build Better Health Systems?

Americans spend a lot of money on prescription drugs. Drug spending could reach as high as $610 billion by 2021, and the price of medications continues to rise. That’s why it’s increasingly important to encourage doctors to prescribe generic options—which are as effective as brand names, but much less expensive. These efforts were unsuccessful for some time at Penn Medicine, the University of Pennsylvania’s health system, but in May 2016 Penn became one of the best-performing generic prescribers in the country. Seemingly overnight, the health system went from prescribing 75 percent generic medications to 98 percent. Among the top 75 drugs, this saved $32 million over two and a half years.

What changed? The day before the spike, doctors had to manually select the generic drug in the electronic health record. The next day—using a tactic from behavioral science—Penn Medicine changed the default to the generic option. This still allows doctors to opt-out of the generic choice, but tweaking the system’s design led to a meaningful change in physician behavior.

Given the huge success and low cost of this behavioral intervention, you might think that these insights about behavior are applied in the health space all the time. Unfortunately, despite growing evidence that behavioral design improves health outcomes, it’s used mostly for one-off experiments. Even if a hospital makes strides by using behavioral science to address one problem, that doesn’t guarantee that the approach spreads organically to others. Most health organizations don’t have staff dedicated to introducing, testing, and then scaling behavioral interventions.

It’s an evidence-based logic that the medical field already uses to develop new drugs and treatments, but in this case applied to human behavior across a health system.

What if they did? Building behavioral science teams and methodologies into health systems would create more and better solutions to some of the toughest problems in health. A Behavioral Design Team (BDT) could pilot and test potential solutions before a hospital makes large investments. Learning from failures will rapidly inform future innovation. It’s an evidence-based logic that the medical field already uses to develop new drugs and treatments, but in this case applied to human behavior across a health system.

Hospitals that use a BDT across the care continuum could better optimize referrals, reduce missed appointments, improve diagnosis procedures, better leverage electronic health records, and more. And importantly, the most effective changes wouldn’t be isolated but rather spread across the system.

As the practice becomes standard throughout an organization, the marginal cost of additional design improvements will shrink. It would also mean that new processes could be designed using this approach from the outset, leading to even more efficiency and cost savings. Both of us have explained elsewhere in greater detail how these teams could work, Mitesh in a recent paper in the New England Journal of Medicine, “Nudge Units to Improve the Delivery of Health Care,” and Ted in an issue brief for the Commonwealth Fund, “Behavioral Design Teams: The Next Frontier in Clinical Delivery Innovation?”

Creating a BDT in health care wouldn’t reinvent the wheel. There are models for embedding behavioral experts directly into complex organizations to systematically align programs and services with the realities of human behavior. The federal government has done it, with great success.

Under the Obama administration, the Social and Behavioral Sciences Team (SBST) helped student borrowers increase effective repayment plans by 29 percent.

Likewise, Behavioral Design Teams (BDTs) are being embedded in cities around the country, including New York City and Chicago, initiatives that Ted leads. The BDT in New York City increased flu vaccinations by 5 percent and reduced the number of eligible SNAP (Supplemental Nutrition Assistance Program) recipients who don’t renew their benefits by 5.5 percent. The Chicago BDT redesigned the city’s parking ticket notices to increase on-time payments by 33 percent, reducing fines for Chicagoans. Importantly, these interventions not only improved outcomes for beneficiaries but also are cost-effective. For instance, in another SBST effort that increased savings for military members, an intervention generated an impact 100 times larger than the impact-per-dollar spent on tax incentives.

A model for embedding a BDT in a health setting already exists. The University of Pennsylvania hosts a collaboration between the Center for Health Incentives and Behavioral Economics and the Penn Medicine Center for Health Care Innovation. In 2016 Penn Medicine launched a “Nudge Unit”—the first behavioral design in the world embedded within a health system—focused on continuously developing interventions and addressing behavioral barriers. The Penn Medicine Nudge Unit, led by Mitesh, is already tackling opioid prescribing, uncontrolled diabetes, and cardiac rehab referrals, among other issues. Within this medical center, the coordinated effort to instill behavioral insights across the continuum will help patents maintain better lives.

These Behavioral Design Teams in health are only just beginning—there’s plenty more innovation to come—but they offer an evidence-based innovation pathway to improve health care delivery and reduce the cost of care.

Disclosure: Ted Robertson is an employee of ideas42, a founding partner of the Behavioral Scientist.

Mitesh S. Patel is director of the Penn Medicine Nudge Unit, an assistant professor at the Perelman School of Medicine and the Wharton School at the University of Pennsylvania, and a staff physician at the Crescenz VA Medical Center in Philadelphia. His research focuses on combining insights from behavioral economics with scalable technology platforms to improve health and health care.

Ted Robertson is a managing director at applied behavioral science nonprofit ideas42, and launched and runs the organization's NYC and Chicago Behavioral Design Teams. He works on the strategy and application of behavioral science to health care, city government, and national civics. Previously, he was a visiting scholar and fellow at the Harvard Kennedy School of Government in its civic innovation practice.